Amazon Marketplace and Merchants | What You Need to Know

What You Should Know About Amazon Marketplace and it’s Merchants

Amazon Marketplace is a fixed online marketplace where independent sellers can offer new and used items in the same virtual world as Amazon’s offerings, to upwards of millions of potential customers. The emphasis here is on “fixed,” because unlike bidding sites, such as eBay, with Amazon, you pay the price you see listed.

As a buyer, Amazon is extremely user friendly, and as much as Google’s cornered the search engine world, the name Amazon conjures up the phrase “online shopping.” Millions and millions of people go to Amazon to see what deals they can find for a product.

That’s the beauty of Amazon Marketplace. A simple search in their database will show you, the potential buyer, not only one or two vendors selling your desired product, but it’ll show you lowest prices (including prices for used versions).

When setting up an Amazon Marketplace Account, sellers have the option of using an individual sellers account, or a Professional Sellers account, which comes with a required Pro-Merchant Option ($39.99 per month). Individual sellers can also opt for the Pro-Merchant Option, which would eliminate the .99 per item sales fee, and offers you more options such as Amazon’s order management tools and a bit more flexibility.

When you begin to sell with Amazon, the first thing you must do is manage your inventory within your seller account. This includes listing your sellable items, which can be done by a simple search of Amazon’s existing inventory, or by adding the product yourself.

Sellers have a fair amount of freedom on their pricing, product descriptions, shipping method and return policy, which makes Amazon’s Marketplace such an attractive place for merchants.

But wait … must you compete with Amazon?

Amazon Marketplace is designed to help third-party merchants sell their products online. It’s probably what you have in mind if you use the site, right. But last year (June, 2012), the Wall Street Journal reported that some Amazon Marketplace merchants noticed the online giant examining their most popular products, and would then offer those products, directly and negatively affecting the third-party merchants’ sales. Jeff Peterson of Collectible Supplies claimed his sales plummeted 80% after Amazon decided to sell Pillow Pets, a product he was selling 100 times per day, at one point.

Whether that’s the case or not is up for argument. Legally speaking, there’s little anyone could do. Amazon does not partner with merchants, thus they are in their right to sell what they wish (as are you). What can be agreed upon is that while Amazon takes a piece of the revenue generated from each merchant’s sales, most of the profit goes back to the merchant. It’s not uncommon for a merchant to increase his sales by 50%, just for joining the Marketplace.

Still, you risk competing against the biggest of big guns, Amazon, if you believe what Peterson and other merchants say. Is that enough to keep you away from the Marketplace? Certainly not. Amazon is online selling and buying. If you don’t join the fray, it’d be the same as keeping your store closed on Black Friday.

Are you wondering if Amazon’s Marketplace is right for you? Do you have a presence there already, but looking for some rejuvenation? OperationROI can help. Call us at 1-888-277-5429 or fill out our contact form for more information.